ACCURACY OF STATE INSURANCE DEPARTMENTS IN DISPUTE

Consumers who call their state insurance department to check on the financial health of an insurer are doing the right thing, the National Association of Insurance Commissioners says.

But in recent testimony before the U.S. Senate Committee on Banking, Housing & Urban Affairs, Martin D. Weiss said most states give out inaccurate information.

Weiss employees recently called the insurance commissioners' offices in all 50 states to check on the health of Presidential Life Insurance Company -- a firm that all of the major ratings agencies agree is shaky.

Weiss told members of the Senate panel:

-- "Representatives at 24 state insurance departments (including Florida) made positive statements about the company, telling the caller that it is in good standing, has been the subject of no complaints, or has a good rating from A.M. Best."

-- "Fifteen states gave out A.M. Best's latest rating of 'B+,' sometimes explaining that it meant 'very good.' However, none of the states citing the A.M. Best rating explained that a B+ grade, in the A.M. Best scale, is widely interpreted by industry professionals as a negative indication."

-- "Two of the states -- Tennessee and South Carolina -- stated that this company is rated 'A+' by A.M. Best, which is clearly false."

-- "In 10 states, the callers were transferred repeatedly. And in three states -- New Mexico, New Jersey and Missouri -- the phones were not answered."

Weiss said that California officials did the best job. They gave out the names and phone numbers of all five ratings agencies. The departments in Nevada, New York and North Dakota did say the firm may have a problem with junk bonds.

The office of Florida Insurance Commissioner Tom Gallagher confirmed that Presidential Life is licensed in the state and said it was in good standing, Weiss Research reported.

Kevin Hennosy, a spokesman with the National Association of Insurance Commissioners, said that he did not share Weiss' outlook on the validity of state insurance departments' information.